S. Korean govt won’t allow futures trading in cryptocurrency

S. Korean govt won’t allow futures trading in cryptocurrency

Regardless of fiery demand at home and trend overseas, Seoul authorities made it clear that they do not regard cryptocurrencies as legitimate financial product and therefore will disallow its futures and options trading until they can draw up clear guidelines on the digital currency and its trade.

The government’s stance put stop to local brokerage houses in their readiness for futures and options tracking bitcoin and other cryptocurrencies after Chicago’s two main exchanges, the Chicago Mercantile Exchange and the Chicago Board Options Exchange, announced that they will launch bitcoin futures contracts.

The Nasdaq reportedly is mulling to allow futures trade in the virtual currency as early as in the second quarter of next year.

The news of the cryptocurrencies joining the mainstream exchanges has fueled the fad over the virtual currency whose value that had been just $12 in 2013 now hovers near $12,000.

Korea is the third largest bitcoin market after the United States and Japan, but the government put its foot down, authorizing the supervision of the trade to the Ministry of Justice instead of the Financial Services Commission to send a strong message to the market players that it considers it to be as highly speculative and risky activity as gambling that needs to be regulated instead of being encouraged.